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PostPosted: Fri May 22, 2020 11:43 am 
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bimboman wrote:
tc27 wrote:
bimboman wrote:
tc27 wrote:
I am not a believer in MMT nor do I think high government borrowing is a good thing (its just far better than the alternatives currently) but the assertion that the UK will go 'bankrupt' is nonsense.

But if you really believe it then I am sure you can bet against sovereign debt with your own money.



Sorry, you’re correct they’ll just smash the value of sterling and eventually create inflation.


Yeah borrowing at these levels is risky and likely to have negative consequences (but is still better than the alternative).

However you said bankrupt...

When specifically will the country be unable to pay its debts?

Whats the value of your short position on UK Gilts?



It will fail to pay its debts when the interest rates required to support international purchases over take the ability to borrow. But correct again they can print as much as they like, it however isn’t consequences free.


Another 1,000 quid in April alone.


What tranche of gilts have you betted against? Whats specific vehicle or fund are you using?


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PostPosted: Fri May 22, 2020 11:47 am 
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nardol wrote:
You can't go bankrupt in the UK with your own currency, but you can create a currency that nobody wants. It will lose its value, imports become more expensive, financing debt grows, printing presses go into overdrive, currency deflates further. Its the Venezuelan or Zimbabwean model.

All currencies in this category at the moment.

While not technically a bankruptcy, it's not exactly solvent either. Even if it is technically.


FWIW I think its legitimate to be a hawk on borrowing but its worth making a slightly nuanced argument rather than throwing around big number and screaming about bankruptcy.

Also some acknowledgement of the counterfactual of the effect on the economy of a pandemic if there was no government intervention.


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PostPosted: Fri May 22, 2020 11:48 am 
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What tranche of gilts have you betted against? Whats specific vehicle or fund are you using?



Who knows which bit of the 62 billion was mine. However it was created an sold.


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PostPosted: Fri May 22, 2020 11:49 am 
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BlackMac wrote:
bimboman wrote:
DragsterDriver wrote:
Frodder wrote:
bimboman wrote:
Uk unemployment April up 856,000 ......


900,000 more unemployed than Feb 2020.


Yay the lockdown.


and that's just the start


House building is about to be a bloodbath. Proper bad times.



My mates a brickie for hire and reckons very bad times coming in north Essex.



Struggling for sympathy to be honest. I tried to hire one to do facing brick work on my extension last year and the pricks were wanting nearly £500 a day.


Sounds right for a 2+1 gang? If it was per man then...


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PostPosted: Fri May 22, 2020 12:07 pm 
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bimboman wrote:
Quote:
What tranche of gilts have you betted against? Whats specific vehicle or fund are you using?



Who knows which bit of the 62 billion was mine. However it was created an sold.


How?

Assume its a fund thats taken a short position as otherwise very odd not to check the redemption period and coupon rate?

How dire do you think things have to get for these gilts to be defaulted:

https://www.bloomberg.com/markets/rates ... t-bonds/uk

I mean you will make some money but the collapse of civilisation will make it hard to spend...

Also if your going to bet against government bonds why UK gilts? Surely Southern Eurozone a much safer bet?

Very strange.


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PostPosted: Fri May 22, 2020 12:12 pm 
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tc27 wrote:
bimboman wrote:
Quote:
What tranche of gilts have you betted against? Whats specific vehicle or fund are you using?



Who knows which bit of the 62 billion was mine. However it was created an sold.


How?

Assume its a fund thats taken a short position as otherwise very odd not to check the redemption period and coupon rate?

How dire do you think things have to get for these gilts to be defaulted:

https://www.bloomberg.com/markets/rates ... t-bonds/uk

I mean you will make some money but the collapse of civilisation will make it hard to spend...

Also if your going to bet against government bonds why UK gilts? Surely Southern Eurozone a much safer bet?

Very strange.



A 1,000 quids worth of Bonds was sold on your behalf as well. You seem to not understand my reference .

The bonds are sold, the debt created on behalf of us all.


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PostPosted: Fri May 22, 2020 2:07 pm 
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bimboman wrote:
tc27 wrote:
bimboman wrote:
Quote:
What tranche of gilts have you betted against? Whats specific vehicle or fund are you using?



Who knows which bit of the 62 billion was mine. However it was created an sold.


How?

Assume its a fund thats taken a short position as otherwise very odd not to check the redemption period and coupon rate?

How dire do you think things have to get for these gilts to be defaulted:

https://www.bloomberg.com/markets/rates ... t-bonds/uk

I mean you will make some money but the collapse of civilisation will make it hard to spend...

Also if your going to bet against government bonds why UK gilts? Surely Southern Eurozone a much safer bet?

Very strange.



A 1,000 quids worth of Bonds was sold on your behalf as well. You seem to not understand my reference .

The bonds are sold, the debt created on behalf of us all.


Apologies - I misread I thought you claimed to have spent £1000 shorting UK gilts.

Though as certain as you appear to be that the UK will not repay them you really should look to do this.


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PostPosted: Fri May 22, 2020 2:14 pm 
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You get my point, we’re already short those bonds, 1,000 quids worth in April for every man women and child in the UK. Sold to the Bank of England. Proper funny money .


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PostPosted: Fri May 22, 2020 2:20 pm 
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bimboman wrote:
You get my point, we’re already short those bonds, 1,000 quids worth in April for every man women and child in the UK. Sold to the Bank of England. Proper funny money .


No we are not 'short' in any meaningful sense of the word.

Again when do you expect the UK to go bankrupt? Are you going to short the 2, 5 or 10 year bonds?

FWIW I bet you could make a killing on the 2 and 5's as they are in negative yield territory.


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PostPosted: Fri May 22, 2020 2:30 pm 
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If you short a bond and the issuer of the bond goes bust.... Does the short not become worthless?

Obviously you sell before such an event


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PostPosted: Fri May 22, 2020 6:42 pm 
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Joe media gone pop. Shame that one.


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PostPosted: Fri May 22, 2020 7:14 pm 
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tc27 wrote:
bimboman wrote:
You get my point, we’re already short those bonds, 1,000 quids worth in April for every man women and child in the UK. Sold to the Bank of England. Proper funny money .


No we are not 'short' in any meaningful sense of the word.

Again when do you expect the UK to go bankrupt? Are you going to short the 2, 5 or 10 year bonds?

FWIW I bet you could make a killing on the 2 and 5's as they are in negative yield territory.


Oooh the EU's not perfectly consistent therefore everyone (especially the Germans in the Brexiter playbook) should pay for Greece's illegal debt. I don't think Descartes need lose any sleep over this line of unreasoning.



What’s wrong with you? Even after explaining I was using an analogy.

You don’t even know how our debt is calculated, and yes we meaningfully owe that debt as tax payers in the UK.

When the debt can’t be serviced any more.


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PostPosted: Fri May 22, 2020 7:17 pm 
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nardol wrote:
If you short a bond and the issuer of the bond goes bust.... Does the short not become worthless?

Obviously you sell before such an event



You buy the bonds back Nardol not sell them.


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PostPosted: Sat May 23, 2020 7:54 am 
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bimboman wrote:
nardol wrote:
If you short a bond and the issuer of the bond goes bust.... Does the short not become worthless?

Obviously you sell before such an event



You buy the bonds back Nardol not sell them.


But retail investors can't physically short individual issues, there may be ETFs that provide cross-curve exposure and a weighted average duration of 'x' but I don't know.

Have no idea why you'd want to short gilts as the BofE has a specific mandate to control the curve to ensure that borrowing costs don't spiral.


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PostPosted: Sat May 23, 2020 8:11 am 
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FFS it was an analogy...


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PostPosted: Sat May 23, 2020 3:46 pm 
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bimboman wrote:
nardol wrote:
If you short a bond and the issuer of the bond goes bust.... Does the short not become worthless?

Obviously you sell before such an event



You buy the bonds back Nardol not sell them.


But how do you buy the bonds back if the issuer is in default?


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PostPosted: Sat May 23, 2020 4:19 pm 
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nardol wrote:
bimboman wrote:
nardol wrote:
If you short a bond and the issuer of the bond goes bust.... Does the short not become worthless?

Obviously you sell before such an event



You buy the bonds back Nardol not sell them.


But how do you buy the bonds back if the issuer is in default?



Believe it or not where corporate bonds are concerned there’s a very active market in defaulted bonds.

My point on gilts was as an analogy in regard to us being the issuer.


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PostPosted: Tue May 26, 2020 11:35 am 
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LATAM and Hertz gone


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PostPosted: Thu May 28, 2020 1:47 pm 
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another week gone, another 2.1million US people file for unemployment claims, taking the total to over 40 million or 1 in 4 workers that have asked for unemployment benefits.

markets don't bat an eyelid, probably because coninuing claims drop to only 21 million.


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PostPosted: Thu May 28, 2020 1:52 pm 
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massive_field_goal wrote:
another week gone, another 2.1million US people file for unemployment claims, taking the total to over 40 million or 1 in 4 workers that have asked for unemployment benefits.

markets don't bat an eyelid, probably because coninuing claims drop to only 21 million.



Also many of the claims are from people who are also furloughed.


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PostPosted: Thu May 28, 2020 2:33 pm 
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massive_field_goal wrote:
another week gone, another 2.1million US people file for unemployment claims, taking the total to over 40 million or 1 in 4 workers that have asked for unemployment benefits.

markets don't bat an eyelid, probably because coninuing claims drop to only 21 million.


And the Dow is up even as the USD is a smidgen weaker...... US equity market LOVES free money.


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PostPosted: Fri May 29, 2020 10:35 am 
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Volkswagen putting 3.2 billion into Chinese electric cars and batteries, those dastardly Chinese are really being punished for COVID. Meanwhile the UK car industry made 197 cars last month, normally it makes 71,000


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